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Archive for October, 2014

One question I get asked when talking about soil sampling is; ” Can I save enough lime to pay for site-specific sampling?” The answer is YES YOU CAN! 76% of the time the savings on lime alone recoups the cost of site-specific sampling.

As the chart below shows it is important to keep the pH between the 6.3 to 7.0 range. As your PH gets more acidic some nutrients have reduced availability such as: potassium, phosphorus, magnesium and calcium. Also some nutrients such as phosphorus, zinc, copper, boron and manganese have reduced availability at higher pH or more alkaline soils.

To get your fields soil sampled or to get more information contact your local Mercer Landmark agronomy representative.

What happened to harvest pressure? The bears were caught off guard and the bulls were left with a feeling of false hope that the market may go back up next week. Looking at the lead-month soybean continuous chart, the market did breakout above $10 but could not hold the gain on Friday profit taking with November soybeans closing down 15 cents at $9.78. If the market were to trend higher and close the gap at $10.40, there is the potential to go back to the $11.50 level. We would have to see continued large exports, and dry weather in South America for this to happen.

Looking ahead, the soybean market will continue to be in a sideways trading band until the November Supply Demand report. Here at UMS, we continue to believe supply will be sufficient next year along with increased acres in South America. Look for prices to be lower next spring.

What if you had the potential to cut input costs without hurting your yield. Would you be interested? With current commodity prices I am guessing you would be. It involves just three words, soybean planting population. Why am I talking about planting populations at fall harvest? Because now is a good time to evaluate if you are using too high of a seeding rate. Take a look at the two pictures below. Which one would you rather harvest? Which one will yield the best?

Picking the right soybean variety for your field’s fertility and productivity level, and planting at the right population for your row spacing can help maximize your yield opportunity. If you are harvesting fields that are lodged and look like the picture on the right, then there is a good chance your planting population was too high, or you have the wrong variety planted in that field (your Mercer Landmark agronomist can help you with the latter).

At an average current seed cost of $50 per 140,000 unit bag of seed, you can save $7.14 for every 20,000 seeds reduction in seeding rate. Research has shown final harvest stands of 100,000 to 120,000 plants/acre can yield as well as 180,000 to 200,000 plants/acre. Soybeans have an amazing capacity to compensate for thinner stands. As a starting point consider 150,000-170,000 planted seeds/acre if you have 15 inch row spacing, and 170,000-190,000 planted seeds/acre if you have 10 inch or narrower row spacing. So as you are sitting in your combine this fall cutting soybeans remember it is an excellent time to evaluate if your planting population is where it should be to avoid lodging issues (like the picture above on the right), or could you reduce your seeding population thus reducing your input costs and still maintain yields that will maximize your profits.

Stalk rots cause damage and yield loss in many corn fields across North America each year. Depending on location, stalk rot organisms may include anthracnose, Gibberella, Diplodia or Fusarium, all of which survive in corn residue and are spread to the next crop by wind and/or rain. Stalk rots can reduce corn yield by killing the plant before physiological maturity. They can also cause plant lodging, increasing harvest losses and impeding harvest progress. Here are a few of those stalk rot diseases and what to look for when scouting your fields in the fall.

Anthracnose Stalk Rot

Anthracnose is the most common stalk rot disease faced by corn growers worldwide, with yield losses reaching as high as 40% as a result of reduced ear size and stalk lodging. Infection is favored by warm temperatures (70-80 F) and high humidity. Anthracnose has both a leaf and a stalk phase in corn. The infection can spread from leaves to stalk, or the stalk may be infected through the roots or base of the plant, or through insect cavities or other wounds in the stalk. Shiny black blotches which often coalesce are a distinguishing characteristic of anthracnose stalk rot. Removing the leaves and leaf sheaths from the lower stalk is the best way to inspect for anthracnose. Splitting the stalk reveals degenerated pith tissue, often with only the vascular bundles remaining. Diseased tissue is usually dark gray to brown in color.

Gibberella Stalk Rot

Another stalk rot common in most corn growing regions is Gibberella. Wet, cool weather during early ear-fill is conducive to disease development. Infection occurs through the roots or leaf collar of the plant and spreads to the stalk as the plant is weakened by stress. Rotting generally affects the roots, crown and lower internodes. Gibberella stalk rot can best be identified by splitting the stalk. The pith inside is disintegrated and characterized by a pink or reddish color. On the outside of the stalk, small superficial black spots (perithecia) are often evident.

Diplodia Stalk Rot

Diplodia and Gibberella have a similar disease cycle both thriving in warm, wet weather 2 to 3 weeks after pollination. Diplodia stalk rot may first reveal itself when affected plants die suddenly during mid- to late ear-fill. Upon examination, dark brown lesions can be found extending in either direction from the node. Small black spots (pycnidia) may develop just beneath the stalk epidermis near the nodes. The black dots are not easily rubbed off, which distinguishes Diplodia from Gibberella. Diplodia results in rotted stalks that are disintegrated and discolored, allowing the stalk to easily break. The discoloration is brownish in appearance, not pink like Gibberella.

Fusarium Stalk Rot

Fusarium infection is favored by warm, wet conditions following stress. It invades through the roots, wounds in the stalk or leaf scars. This disease can colonize any part of the plant and is commonly found on corn ears. The earliest symptoms of Fusarium stalk rot are wilted plants in the field. Infected plants take on a grayish-green hue, then turn tan. Outward symptoms of the disease are indefinite discolored patches on the lower internodes. Stalks feel spongy as the pith disintegrates, leaving vascular strands intact. A whitish-pink to salmon discoloration of the remaining pith and vascular strands may be observed when stalks are split. In addition, roots take on a reddish-pink discoloration.

How do you check for these possible stalk rot problems or possible lodging in the future? One way that I check when scouting a field, I will test 10 stalks in a row. I like to push them 12 inches or more and touch the row next to it. If the stalk snaps off check the bottom of the other stalks right above the roots (as seen in the pictures below). If you can pinch your fingers together, then you will want to seriously think about getting that field harvested. If you can’t pinch your fingers then you have more time to let that crop dry down.

Contact your local Mercer Landmark agronomist to help you check for stalk rot issues and staging.

The two most popular weather models are the GFS (American) and the ECMWF (Euro). There is no question it is very hard when trying to understand what the extended forecast could bring given the variables with model runs and key pieces. With weather being a big factor in not only the crop we produce but the current harvest time, we thought it would be good to discuss what models can offer and some differences in them. The GFS has a maximum skill range from days 1 to 8 in the summer and fall and 1 to 9 during the winter and spring. ECMWF has 1 additional day than the GFS. The day discrepancies cause the GFS to be as accurate as yesterday’s ECMWF model run. Both models are good for predicting different things and the majority of weather forecasters use a combination of the models which is why there is usually never a consistent weather report from every agency. The GFS does a good job of predicting pattern shifts 37% of the time, the ECMWF does well with pattern shifts 61% of the time. After 6 days, the GFS will tend to only detect the very largest scale global pattern shifts. ECMWF is half a day ahead of catching synoptic pattern shifts and is more accurate in general when patterns shift.

When looking at winter weather, the models also have differences. GFS is generally better when looking into the next 24 hours. When going beyond 24 hours, an average of the two is recommended. When viewing winter weather beyond 3-5 days, the ECMWF has the better track record in being accurate. When judging the two weather models year-round, the GFS and ECMWF are similar in the nearby and the ECMWF is significantly better beyond 6 days. Once a month, the GFS model has “dropouts” where the forecast is a huge miss and inaccurate and differs from the ECMWF which doesn’t have “dropouts”. GFS tends to have a warmer bias in the upper troposphere and a cold bias for the afternoon temps during warmer months. The ECMWF tends to underestimate heavy precipitation events and tends to have a cold bias in the stratosphere and warm bias for morning temps.

If you have talked to me recently, you probably have heard me mention what the technical or charts were showing, and it shouldn’t surprise you that I like to follow the charts. The long-term charts let me take a longer view of the markets. They remove a lot of the day-to-day noise (the volatility) that I watch all day on my electronic screens of the live markets. Having a longer-term view gives me a better feel for trends and, most importantly, for when the trends change. Regardless of what the charts say, here are five market scenarios you should be watching that could create turnaround that everyone has been waiting for.

5 market factors

1. What if corn acres planted in South America go down?

Cash bids in the western Corn Belt dropped below $3 this year, but it was even worse in Mato Grosso, Brazil, where cash prices dropped to $2.10 per bushel. This will reduce full-season corn by as much as 10%. Many farmers will not even bother with double-crop corn if the cash bid stays below $3 in the local market this winter.

2. What if U.S. farmer’s plant significantly less corn with less fertilizer next spring and then there is bad weather?

My early indications are for 1 to 2 million acres less corn in 2015. A lot of farmers have indicated that they would also be cutting back on fertilizer and other inputs in 2015 because of the tight margins. This will make the market respond violently to any weather threat.

3. What if there is bad weather in South America during its next growing season?

Last year, farmers in South America had almost ideal growing conditions. The odds of two years of ideal conditions is very low.

4. What if the U.S. has bad weather during the 2015 growing season?

A pattern of good yields has been observed in even-number years like 2014 and less-than-trend yields in odd-number years. It does not work all the time, but odds are good that the national average yield in 2015 for corn and soybeans will be less than the record yields of 2014.

5. What if China steps up and buys corn the way it has been buying soybeans?

China has become the dominant global buyer in the soybean market. I expect it to become the dominant global buyer of corn in the next five to 10 years. I think it will be amazing how much corn is sold to China over the next 18 months. China will use the current bargain-basement price to fill out its strategic grain reserves.

Final thoughts

By some time in early 2015, I expect the trend to change from sideways to an uptrend.

I am watching my weekly continuation charts for the first time that the nearby futures can close above the two previous weeks’ high. This could be as early as December 2014 or as late as March 2015.

This is a signal that end users will not want to ignore, and it should give hope to growers waiting for higher prices.

This fall, markets responded to record corn and soybean crops in the U.S.: Cash corn and soybean prices fell to the lowest level since 2009. When corn drops below $3.00 per bushel, it is essential that you make every last penny you can. The extra 30 to 50 cents you can make on your 2014 corn and soybeans can be the difference between a profit or a loss this year.

How can you do this? To make the right merchandising decisions, you need to understand two basic merchandising concepts: basis and carrying charge.

Basis is the difference between your local cash bid and the Chicago Board of Trade futures market. Think of basis as your cost of getting your corn or soybeans to Chicago. Add in the operating costs — and a profit — for your elevator. The normal basis pattern is for the worst basis at harvest. After that, basis levels usually improve by the following spring and summer. This year, basis levels were really wide at harvest in the western Corn Belt. They are expected to improve dramatically by next year.

The second basic concept is carrying charge. A carrying charge is when the futures contracts that are trading two to six months out in the future are trading at a higher price level than the nearby futures contracts. (In other words, the CBOT futures market usually has a carrying charge “built in.”) Here’s an example: Let’s say July 2015 Corn futures are trading at $3.70, and December 2014 Corn is trading at $3.40. In that case, the July 2015 corn contract is trading 30 cents higher than December 2014 Corn. In other words, the corn market “has a 30-cent carry.”

If you understand the basis pattern in your area of the country, and understand how carrying charges work, you can make better merchandising decisions. When you make better merchandising decisions, you are running your farm to maximize dollars — not just production.

For corn farmers this year, the combination of improved basis and the large carrying charge makes it a logical decision to hold corn until June or July of 2015. Farmers in the western Corn Belt have basis levels as wide as 80 cents below the futures market. But basis will improve (by perhaps 40 cents) and the carry will add another 30 cents. In other words, farmers in the western Corn Belt can likely make 70 cents per bushel holding corn until next year. Even after you deduct 20 to 30 cents for interest, shrink, and electricity, you should still add 40 to 50 cents to your bottom line. If you have 170-bushel-per-acre corn, then you have an extra $68 to $85 per acre in revenue.

For soybean farmers, this is the first time in many years that you have a significant carrying charge in the soybean futures market. Storing soybeans is not as attractive as storing corn, but it still makes sense (as in dollars and cents). If we get the normal basis improvement by next year — and keep the current carrying charge in the soybean futures market — then it can add to our bottom line. Western Corn Belt farmers should make an extra 30 to 40 cents per bushel holding soybeans into next spring and summer, even after figuring shrink and interest. For the eastern Corn Belt farmers, it’s a way to make an extra 20 to 30 cents per bushel. These days, with soybeans below $10 per bushel, it is more important than ever to earn that additional return.

I get this question a lot: “If I have limited bin space, should I store my corn — or my soybeans?” Like most years, this year you will make the most money storing corn. I also think the fundamentals for corn basis improvement are much better than soybeans as we look ahead to 2015.

As the combines start rolling, the yield numbers are coming in with some quite high numbers. Rain fall was a big factor this summer, however soil variability is always a factor every year. Talking with growers as they watch their yield monitors; there can be a lot of change in soil types and hillsides.

Looking to improve the consistency of the farm, soil testing is a major role in this. Using zone and grid testing for soil test is a unique way to get soils on a level playing field to feed the crop you are growing. As the results come back on the test we can figure out what areas may need a little more to deliver that higher potential.

This is where variable rating the fertilizer can save you on amounts needed and giving a better return. It is better for the environment also to avoid excessive amounts on soils unable to hold the nutrients.

As this harvest moves on and you consider the plowdown rates of fertilizer don’t forget these high yields are removing large amounts of nutrients and we need to replace what we remove to plan for a successful year next year.

Following recent meeting sponsored by USDA/FSA there has been much talk about the Margin Protection Program. Like many new programs the first discussions usually result in more questions than answers. How is it calculated? What does it cover? How will the program affect my farm? While margins in dairy look very promising in the near futures, farmers should consider dedicating a few minutes of study before the Nov 28 deadline. It could protect their margins.

Double click on the link below to view the USDA 2014 Farm Bill- Fact Sheet on the Margin Protection Program for Dairy dated August 2014.